Certainly, it is a big day for agricultural commodity
investors pondering what 2013-14 might bring, with the US Department of
Agriculture to publish its first full forecasts for the season.

The USDA's monthly Wasde report on Friday begin a new
seasonal cycle, revealing initial estimates for how world supply and demand on
crops such as corn, cotton, soybeans and wheat will change in the forthcoming
year.

But the onset of the new numbers does not mean that data for
the aging 2012-13 will be overlooked – not this time, at least.

'Impossibly tight'

"The new crop data will be important, but the market will still
look at cold crop numbers," Rich Nelson at Allendale said.

Market expectations for US corn in Wasde and (current estimate)

2012-13 carryout stocks: 749m bushels, (757m bushels)

Highest estimate: 800m bushels; lowest 684m bushels

2013-14 carryout stocks: 1.99bn bushels, (2.18bn bushels)

Highest estimate: 1.99bn bushels; lowest 1.39bn bushels

Sources: ThomsonReuters, USDA

"Stocks so tight that even a small revision can have an
impact on the market."

Indeed, soybean supplies are so squeezed that there may be
little scope for cutting the stocks figure.

"The old crop balance sheet is already at pipeline, impossibly
tight," Don Roose US Commodities.

"So if there is a raise in the forecast for demand, we are going
to have to balance it out, and rely on some more imports."

Exports vs crush

And some tweaks on this score may indeed prove the case.

Macquarie analyst Chris Gadd, for one, flagged the potential
for a "resilient pace" of US exports of soymeal, one of the two key products
made from crushing soybeans, to alter USDA thinking.

"We would expect the USDA to increase their full-season
estimate" for soymeal shipments, Mr Gadd said.

"They will manage this growth in demand through a
combination of increased US soybean crush and maybe even reducing domestic
soymeal consumption."

Ethanol vs feed

There is potential too for changes in the corn balance sheet
for 2012-13 too, with Macquarie flagged a pace of US ethanol production which
implied a little more of the grain used for making the biofuel than the 4.55bn
bushels the last Wasde suggested.

"We currently forecast corn usage for ethanol at 4.6bn bushels.
This could quite easily creep up to 4.65bn bushels though," Mr Gadd said.

But Deutsche Bank pointed to a potential boost to old crop
corn supplies from soft exports, about to face increasing competition from Brazil,
and weaker-than-expected US feed demand.

"With the US breeder flock getting older, leading to lower
hatchability, and US broiler eggs sent to Mexico to rebuild the flock post the
recent bout of avian flu, we see near-term corn demand from chicken producers
lower than USDA estimates," Deutsche Bank analyst Christina McGlone-Hahn said.

She forecast feed demand 50m bushels below the USDA's
4.4bn-bushel forecast, and season-end stocks of 838m bushels - well above the
current figure of 757m bushels, which most other analysts expect to see a
slight downgrade.

More sowings

Even so, whatever figure the USDA does come out with for
corn inventories at the close of this season, it will be well below the estimate
for the end of 2013-14, a season for which US growers are seen enjoying a far
better ride that last year when drought sent yields to a 17-year low.

Market expectations for US soy in Wasde and (current estimate)

2012-13 carryout stocks: 123m bushels, (125m bushels)

Highest estimate: 130m bushels; lowest 107m bushels

2013-14 carryout stocks: 236m bushels, (250m bushels)

Highest estimate: 325m bushels; lowest 157m bushels

Sources: ThomsonReuters, USDA

The question is how far the stocks figure will alter from the
2.18bn bushels that the USDA pencilled in in initial estimates made at its
Outlook conference in February, long before a grain of corn had even made it
into the ground.

There is one reason to think the figure may be higher, with US
farmers in an official survey in March saying that they intended to plant 97.3m
acres with the grain, 800,000 acres more than the USDA thought the month
before.

And the USDA tends to stick with this official number until
it gets good evidence to counter it, and likely not until after a planting
survey published in June.

… less time

But there is a good reason to expect some downward pressure
on the stocks number too, thanks to the poor pace of plantings, running at its
slowest since 1984 and compromising yield prospects. (This is an issue in China, the second-ranked corn producer, as well as the US.)

Planting pace was one of five key factors, with the
like of soil moisture, that USDA officials, at the Outlook conference,
mentioned as having an impact on yield potential.

"The USDA has in the May Wasde almost all of the time gone
with planting figures from the [March] report," Bill Tierney, chief economist
at AgResource, said.

"But in many years, they have used a different yield
estimate" from that revealed at Outlook conferences.

"In years of later planting, the USDA frequently has
adjusted its yield estimate downward," to account for the slightly shorter growing
season implied.

Yield downgrade?

As for how big any adjustment is likely to be, from the
yield figure of 163.6 bushels per acre unveiled at the Outlook conference, changes
have tended to be in the range of 1-3 bushels per acre, Mr Tierney told
Agrimoney.com.

"I think they are going to come out with something like
160.6 bushels per acre or 161 bushels per acre on Friday."

Not that such a downgrade will necessarily be enough to have
much impact on prices, with Mr Tierney also downbeat on US export prospects, thanks
to the robust competition expected from Brazil, which is expecting a record winter
crop.

Allendale's Rich Nelson, while talked of a 159.3 bushels-per-acre
figure on Friday, said that a number as low as 156 bushels, or less – an unlikely
outcome - was needed to "change the bearish viewpoint" over new crop supplies,
and "suggest slightly higher prices".

'Gauging yield not so
easy'

If the USDA is to make a lowball estimate, it is more likely
in US wheat, specifically hard red winter wheat, for which crop is already
standing, and nursing damage in the southern Plains from drought and late frosts- as documented by crop tours last week.

Not that the tour
estimates may prove so accurate this year, given the impact of the cold weather
in slowing crop development.

"Gauging yield accurately is not so easy when there are no heads
on the wheat," Mr Tierney said.

Investors are expecting an estimate for the hard red winter
wheat harvest of 776m bushels, down 22% year on year.

Quality factor too

This makes wheat, in particular, one crop in which the world
data - although also covering crops largely not in the ground in the likes of
Australia and Argentina – particularly important, Jerry Gidel, chief feed
grains analyst at broker Rice Dairy, said.

"Because we are not going to get a big crop at home, it
matters more what other countries do," Mr Gidel said.

There is also the issue of quality, which will be less
evident from the data.

"What you need to make protein is heat, and we haven't had
that.

"We are not going to have a high protein crop unless we get
a few weeks of heat. But if that happens, the way the crop is it is likely to
wipe out yields."

That is one of the stories which may unfold as the USDA's
first 2013-14 estimates turn into historical numbers.